tag:theconversation.com,2011:/fr/topics/anu-3951/articlesANU – The Conversation2018-06-20T20:06:36Ztag:theconversation.com,2011:article/985482018-06-20T20:06:36Z2018-06-20T20:06:36ZThe great irony in punishing universities for 'failing' to uphold freedom of speech<p>Liberal Senator James Paterson recently <a href="https://www.theaustralian.com.au/opinion/anu-and-western-civilisation-course-time-to-punish-unis-that-limit-freedom-of-thought/news-story/6bfc31e03935c63b12334121e5256e37">called</a> for universities to be punished if they fail to uphold the values of intellectual freedom and free speech. He said fringe academics in universities are “an angry minority” who are “hell-bent on enforcing [their] ideological hegemony”.</p>
<p>The punishment he envisages is the witholding of funds. He argues government funding for universities should be tied directly to following the rules of upholding free speech and academic freedom. Surely this sounds like a good idea – universities <em>should</em> support intellectual freedom and free speech, right?</p>
<p>Of course they should. But that’s not the whole story.</p>
<p>I have been researching the intersection between freedom of speech and politics for decades. In my view, Paterson’s argument is based on incomplete or even incorrect information about how universities operate.</p>
<h2>Universities do uphold free speech</h2>
<p>All Australian universities are <a href="http://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/hesa2003271/s19.115.html">required by law</a> to commit to intellectual freedom as a condition of operating. This is also their <a href="https://theconversation.com/as-melbourne-university-staff-strike-over-academic-freedom-its-time-to-take-the-issue-seriously-96116">central purpose</a>. All Australian universities have guarantees of academic freedom contained in their governance documents, which can be located in the enterprise agreement or elsewhere.</p>
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Read more:
<a href="http://theconversation.com/as-melbourne-university-staff-strike-over-academic-freedom-its-time-to-take-the-issue-seriously-96116">As Melbourne University staff strike over academic freedom, it's time to take the issue seriously</a>
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<p>The <a href="https://ipa.org.au/">Institute of Public Affairs</a> (IPA) <a href="https://ipa.org.au/wp-content/uploads/2017/12/IPA-Report-Free-Speech-on-Campus-Audit-2017.pdf">audit</a> to which Senator Paterson refers to make his point said a number of universities don’t have explicit policies to protect free intellectual inquiry. It did note that:</p>
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<p>Some of Australia’s universities do mention academic freedom in either enterprise bargaining agreements, or as part of other policies, however do not maintain standalone policies on academic freedom.</p>
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<p>It’s not entirely clear what the IPA means by a “standalone policy”. </p>
<p>It names, for example, ANU, for not having such a policy. But ANU does have a <a href="https://services.anu.edu.au/human-resources/enterprise-agreement/21-academic-freedom-and-protected-disclosure">policy</a> on academic freedom outlined in their enterprise agreement with staff. </p>
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<span class="caption">ANU has been under fire from the government recently for declining money from the Ramsay Centre for the Study of Western Civilisation.</span>
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<p>It names UNSW, but again this university <a href="https://www.hr.unsw.edu.au/services/indrel/Academic_EA_2015_Final.pdf">protects academic freedom</a> in at least <a href="https://www.gs.unsw.edu.au/policy/documents/codeofconduct.pdf">two places</a>, its enterprise agreement and in code of conduct documents. </p>
<p>It also names UWA. Yet again, this university <a href="http://www.hr.uwa.edu.au/__data/assets/file/0008/3068936/Academic-Agreement-2017.pdf">does protect academic freedom</a> in <a href="http://www.hr.uwa.edu.au/policies/policies/conduct/code/equity">more than one</a> place, its enterprise agreements and a code of conduct .</p>
<p>There is no good evidence to support the claim universities don’t have any governance policies at all that support intellectual freedom. </p>
<p>As the IPA’s audit acknowledges, many universities - including some of those marked down by the IPA as failing to meet their standard of commitment to intellectual freedom - do, in fact, mention academic freedom in several policy documents such as enterprise bargaining agreements and other codes of conduct. This detail didn’t come across in Paterson’s article.</p>
<p>It all depends on what you define as a standalone policy on intellectual freedom. </p>
<p>In my view, the academic freedom provisions outlined in enterprising bargaining agreements - on which universities have signed off - are a really clear commitment to intellectual freedom. To the IPA, it is not enough.</p>
<h2>What could be considered a breach of academic freedom?</h2>
<p>The kinds of things that would breach academic freedom would be instructions by managers or external funders to research a particular problem, instead of allowing academics to decide their own research focus. </p>
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Read more:
<a href="http://theconversation.com/explainer-what-is-free-speech-64797">Explainer: what is free speech?</a>
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<p>Another example would be academics being asked to cover up findings adverse to their funder, instead of allowing the research results to be published as they are. </p>
<p>And it would breach intellectual freedom if an external organisation were to decide who to hire. Universities’ normal hiring procedures have been designed to preserve and protect intellectual freedom by focusing on academic merit and excellence. Monash University’s <a href="https://www.monash.edu/__data/assets/pdf_file/0003/1294941/Recruitment-And-appointment.pdf">recruitment policy</a> is a good example. </p>
<h2>Should funding determine intellectual outcomes?</h2>
<p>It’s an accepted part of the <a href="https://www.universitiesaustralia.edu.au/Media-and-Events/media-releases/University-philanthropy-on-the-rise#.Wym27XszaUk">contemporary university funding environment</a> that universities seek alternative sources of financial support. This is done in order to reduce their reliance on government funding. It’s a routine part of university management’s jobs to look around for sources to help them meet their mandates of research and teaching. </p>
<p>What’s crucial in securing funding is that universities don’t sacrifice their core principles – especially intellectual freedom. </p>
<p>So, universities can accept funding from almost any organisation as long as that funding is free of influence. The kinds of decisions that need to be made internally by universities include who to hire and what to put in the curriculum. These decisions must be based on principles of merit and academic excellence.</p>
<p>Paterson, and <a href="https://www.canberratimes.com.au/national/act/anu-pulls-out-of-new-ramsay-centre-degree-in-western-civilisation-20180601-p4zj0e.html">other conservative politicians</a>, believe a university declining funding to set up a Centre for the Study of Western Civilisation is a breach of intellectual freedom. But it has been reported that the reason ANU declined this funding was because the funder <a href="https://www.afr.com/news/policy/education/why-the-anu-vicechancellor-brian-schmidt-rejected-the-ramsay-centres-millions-20180614-h11efs">wanted to determine who to hire and curriculum content</a>. </p>
<p>If this precedent were introduced, it would pose a great risk to universities’ independent intellectual inquiry across the country.</p>
<h2>Undermining the university system</h2>
<p>What’s perhaps most worrying about Paterson’s article and the discussion around it is that it contributes to misunderstandings in the broader community about how universities operate. </p>
<p>Group of Eight CEO Vicki Thomson recently described government statements on university funding that deliberately mislead the public as to their financial strengths as <a href="https://go8.edu.au/article/australian-university-sector-policy-and-political-mercy-fake-data">fake data</a>. </p>
<p>Paterson’s article could easily serve the current government’s agenda by helping to undermine universities in the public’s eye. Universities Australia estimates the current funding freeze will cost the economy <a href="https://www.universitiesaustralia.edu.au/Media-and-Events/media-releases/Uni-funding-freeze-will-hit-Australia-s-economy-and-tax-take#.WyhI0_mFOUk">A$12 billion</a>.</p>
<p>We saw this in recent – <a href="https://www.theaustralian.com.au/higher-education/universities-reject-claims-of-gender-language-ban/news-story/765bc2a4750c1aefdcf901d49ca9ddda">again false</a> – <a href="https://www.uq.edu.au/news/article/2018/06/not-quite-end-of-mankind">claims</a> about universities punishing students for using gendered language. Most large organisations have conventions for inclusive language use – <a href="https://www.amazon.com/Style-essential-journalists-professional-writers/dp/1876176547">News Limited</a> and the <a href="https://www.australia.gov.au/about-government/publications/style-manual">Australian public service</a> included. Yet, the minister for education (who presumably knows this) slammed universities for dictating “<a href="https://www.theaustralian.com.au/higher-education/universities-reject-claims-of-gender-language-ban/news-story/765bc2a4750c1aefdcf901d49ca9ddda">nanny state stuff</a>”.</p>
<p>Paterson’s article poses a risk because it could contribute to undermining the value of universities in the broader community. When intellectual freedom is stifled, and government funding withdrawn on the basis that universities don’t do the bidding of private funders, the academy is in deep trouble. </p>
<p>The greatest of ironies is Paterson says he is arguing in favour of “free speech” when his views would truly undermine intellectual freedom.</p>
<p><em>Correction: A draft version of this article was incorrectly published. This is the final edited version.</em></p><img src="https://counter.theconversation.com/content/98548/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Katharine Gelber has received funding from the Australian Research Council and the Academy of Social Sciences Australia.</span></em></p>Most universities do, in fact, mention academic freedom in several policy documents, such as enterprise bargaining agreements and other codes of conduct.Katharine Gelber, Professor of Politics and Public Policy, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/975332018-06-05T20:06:21Z2018-06-05T20:06:21ZANU's new entrance criteria won't do much to improve equity<p>The Australian National University recently <a href="http://www.anu.edu.au/study/apply/new-admissions-for-2020/co-curricular-or-service-requirement">announced</a> that from 2020 it will require all students to meet co-curricular requirements alongside the Australian Tertiary Admission Rank (ATAR) requirement. </p>
<p>The diverse <a href="http://www.anu.edu.au/study/apply/new-admissions-for-2020/co-curricular-or-service-requirement">list</a> of co-curricular requirements includes part-time employment, participation in the creative arts, sports, and community and service activities. Academic internships, international exchange, and scholastic activities such as the prestigious <a href="https://www.googlesciencefair.com/#!?modal_active=none">Google Science Fair</a> are also recognised under the scheme. </p>
<p>This represents perhaps the largest admissions policy shift from a <a href="https://go8.edu.au/">Group of Eight</a> university to date. It’s a clear indication the national university is looking beyond the ATAR to ensure it attracts the most suitable young people to its courses. But it will not do much to improve equity of access.</p>
<h2>Anti-ATAR sentiment</h2>
<p>Sentiment against the Australian Tertiary Admissions Ranking (ATAR) is <a href="https://www.smh.com.au/politics/federal/atar-should-be-simplified-or-even-abolished-says-chief-scientist-alan-finkel-20180423-p4zb74.html">rising</a>. </p>
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Read more:
<a href="http://theconversation.com/should-we-scrap-the-atar-what-are-the-alternative-options-experts-comment-55501">Should we scrap the ATAR? What are the alternative options? Experts comment</a>
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<p>A <a href="https://www.smh.com.au/education/nsw-universities-taking-students-with-atars-as-low-as-30-20160126-gmdvr6.html">Fairfax report</a> in 2016 showed universities were accepting students with ATARs much lower than advertised cut-off scores. The report confirmed suspicions university admissions are <a href="https://myaccount.news.com.au/sites/theaustralian/subscribe.html?sourceCode=TAWEB_WRE170_a&amp;mode=premium&amp;dest=https://www.theaustralian.com.au/higher-education/year-12-and-atar-need-a-rethink/news-story/08187e86c4d8f26d7b514e23eb61e4c9&amp;memtype=anon">opaque</a> and at risk of being gamed <a href="http://campusmorningmail.com.au/news/no-the-atar-cant-be-gamed-but-it-can-be-tuned/">by schools</a>.</p>
<p>Since then, there have been calls across the sector to <a href="https://theconversation.com/atars-you-may-as-well-use-postcodes-for-university-admissions-19154">increase transparency</a> around how ATAR is used for university entrance. And a rising chorus suggests the ATAR should be <a href="https://theconversation.com/should-we-scrap-the-atar-what-are-the-alternative-options-experts-comment-55501">scrapped all together</a>.</p>
<p>More recently, Australia’s chief scientist Alan Finkel has emerged as a fierce opponent of the ATAR system, going as far as to <a href="https://www.smh.com.au/politics/federal/atar-should-be-simplified-or-even-abolished-says-chief-scientist-alan-finkel-20180423-p4zb74.html">suggest</a> the system is “completely obscure” and results in students “being given poor advice” about their post-secondary options. </p>
<h2>What has changed?</h2>
<p>The majority of universities across the country already accept some students based on other-than-ATAR requirements. These include portfolios, interviews, and community service. Most also allocate a number of places to students from underrepresented communities, and specific pathways for Aboriginal and Torres Strait Islander young people. </p>
<p>What’s different about ANU Vice-Chancellor Brian Schmidt’s announcement last week is the specific commitment by a high status, research-intensive university to base admissions on more than “<a href="https://www.smh.com.au/education/community-service-as-important-as-atar-for-year-12s-in-anu-overhaul-20180529-p4zi7n.html">just a score</a>”.</p>
<p>The addition of a co-curricular or “service” requirement follows an announcement by <a href="https://www.canberratimes.com.au/national/act/australian-national-university-to-abandon-atar-as-sole-entry-requirement-20160801-gqi4ai.html?_ga=2.204029648.1351890709.1528065145-1249041768.1524834919">Professor Schmidt in 2016</a> that the national university was looking to “move away from judging students only on their year 12 ATAR results”. </p>
<p>The move will see students required to meet a threshold of out-of-class activities alongside the ANU floor ATAR of 80 for admission to most courses. ANU has two advantages which allow it to take this policy position: </p>
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<li><p>the lowest ATAR admitted to ANU in 2018 was close to 80.00, which means ANU draws almost exclusively from the top quintile of results overall</p></li>
<li><p>ANU enjoys a remarkably high completion rate, with <a href="https://www.theaustralian.com.au/national-affairs/education/third-of-university-students-failing-to-complete-course/news-story/0c70435cf7690878811d957a51523a5b">over 80%</a> successful completions between 2009 and 2014. </p></li>
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<p>This policy may help to attract students with a “near-miss” on their admission into high-status degrees. By necessity, it will certainly encourage already high performing students to look beyond their academic studies and develop their whole selves in the final years of secondary school.</p>
<p>But it won’t dramatically alter the student cohort in terms of encouraging low-SES students to apply. These students are significantly <a href="https://theconversation.com/year-12-results-day-does-the-atar-actually-matter-that-much-48890">more likely</a> to achieve an ATAR under 80 than their more advantaged peers </p>
<p>Rather, ANU’s co-curricular or service requirement will increase competition for places at the lower-end of those students the university already accepts. It gives the university a powerful lever with which to allocate university places moving forward. This is especially important given the <a href="https://cdn.newsapi.com.au/link/9d7c304cafe37e80cf41a5e7b34f4e9c?domain=theaustralian.com.au">increased scrutiny</a> on the use of ATAR as the sole basis for university admissions. </p>
<h2>What does this mean for equity?</h2>
<p>ANU’s plan has <a href="https://psnews.com.au/2018/05/31/universitys-new-admission-plan-wins-praise/">drawn praise</a> from Federal Minister for Education and Training Simon Birmingham. He suggested the policy represents a “commitment to welcome, educate and accommodate the best and brightest Australians, regardless of their background”. </p>
<p>Professor Schmidt has positioned these changes as an access measure. But as higher education policy expert Andrew Norton notes, high-socioeconomic young people tend to <a href="https://andrewnorton.net.au/2018/05/30/will-extra-curricular-admission-requirements-improve-low-ses-access-to-the-anu/">perform better</a> on these kinds of co-curricular requirements than their less advantaged peers. </p>
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Read more:
<a href="http://theconversation.com/your-atar-isnt-the-only-thing-universities-are-looking-at-93353">Your ATAR isn't the only thing universities are looking at</a>
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<p>Non-academic requirements are very common overseas. The US is the most prominent example, where students are required to apply directly to each institution. That system is widely <a href="https://www.theodysseyonline.com/income-students-disadvantage">criticised</a> as advantaging high-socioeconomic students who often enjoy far superior resources, time, and parental support in putting together their applications. There have been significant moves in recent times to address these issues, with the continued adoption of <a href="http://www.commonapp.org/search-colleges">common application</a> processes.</p>
<p>Multiple factors influence young people’s readiness for tertiary study. This is especially true for students from diverse, underrepresented, and low-socioeconomic backgrounds.</p>
<p>First, these young people are at a <a href="https://theconversation.com/career-studies-and-advice-start-early-or-dont-start-at-all-40563">significant disadvantage</a> in terms of the quality and availability of career planning and counselling.</p>
<p>Second, even after they’re admitted, young people from disadvantaged backgrounds are significantly <a href="https://www.ncsehe.edu.au/publications/completing-university-in-a-growing-sector-is-equity-an-issue/">more likely to drop out</a>. This is often due to beyond-academic reasons, such as balancing work and study, caring responsibilities, and social exclusion.</p>
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Read more:
<a href="http://theconversation.com/the-atar-debate-students-need-to-be-able-to-finish-uni-not-just-start-it-36478">The ATAR debate: students need to be able to finish uni, not just start it</a>
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<p>Third, the tertiary admissions process, and the use of ATAR remain <a href="https://www.timeshighereducation.com/news/call-rethink-australian-university-admissions">poorly understood</a> by the community more generally.</p>
<p>Finally, even if these students do succeed, they tend to find it <a href="https://pursuit.unimelb.edu.au/articles/nice-work-if-you-can-get-it">more challenging</a> to secure work experience, and full-time employment after their studies. This is <a href="https://www.thesmithfamily.com.au/%7E/media/files/research/research-evaluation/research-disadvantaged-young-australians-learning-for-life.ashx">due to</a> more limited professional networks and parental support.</p>
<p>In short, less advantaged students require significant additional supports, well beyond acknowledging their diverse pathways for entry into a degree program. These challenges remain the key litmus test for any debate around the continued usefulness of the ATAR.</p><img src="https://counter.theconversation.com/content/97533/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shane Duggan receives funding from the Department of Education and Training. </span></em></p>From 2020, ANU will require students to meet co-curricular requirements alongside ATAR. This significant policy shift is meant to improve equity of access, but won't change much.Shane Duggan, Vice Chancellor's Postdoctoral research fellow, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/592632016-05-20T02:26:08Z2016-05-20T02:26:08ZWant to know if the Paris climate deal is working? University divestment is the litmus test<figure><img src="https://images.theconversation.com/files/123303/original/image-20160520-4475-82gw8j.jpg?ixlib=rb-1.1.0&amp;rect=18%2C54%2C3989%2C2728&amp;q=45&amp;auto=format&amp;w=496&amp;fit=clip" /><figcaption><span class="caption">Green progress? The ANU needs to dig deeper on divestment.</span> <span class="attribution"><span class="source">Nick-D/Wikimedia Commons</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The <a href="https://theconversation.com/the-paris-climate-agreement-at-a-glance-50465">Paris climate agreement</a> has been praised for sending a strong signal to the world that we are now serious about cutting greenhouse emissions. </p>
<p>Yet despite the diplomatic acclaim, the Paris deal doesn’t offer much in concrete terms. It is a simple global show-and-tell regime with no enforcement – if countries miss their targets they will receive little more than a talking-to. </p>
<p>For many, the deal’s saving grace is the <a href="https://theconversation.com/the-earth-has-moved-big-businesss-radical-climate-shift-is-now-unstoppable-52119">message it sends</a> to investors, businesses and the wider world outside diplomatic and political circles. The Economist has <a href="http://www.economist.com/news/international/21683990-paris-agreement-climate-change-talks">summed up this “investment signal” idea well</a>:</p>
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<p>Perhaps the most significant effect of the Paris agreement in the next few years will be the signal it sends to investors… [After Paris] the idea of investing in a coal mine will seem more risky.</p>
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<p>The problem is that there is little to no empirical evidence to support this idea. Will hard-nosed financiers change their ways purely on the basis of long-term pledges that are not supported by short-term actions? Will they redirect vast sums of money because of faith in a loose international treaty? In all honesty, we don’t know.</p>
<p>There are clues, however, if we know where to look. If we want to see whether the investment signal from Paris is working, then universities will probably be – for want of a better phrase – the canary in the financial coalmine. </p>
<p>If Paris has truly signalled to the world that the age of fossil fuels is coming to a close, then it should put the movement to divest from fossil fuels on steroids. </p>
<p>And universities are better placed to divest than many other types of institution. It therefore follows that the success of Paris can be measured by whether it spurs universities to quit investing in fossil fuels. </p>
<h2>Going fossil-free</h2>
<p>Fossil fuel divestment is spreading across the world. According to the campaign group <a href="http://gofossilfree.org/about-fossil-free/">Fossil Free</a>, at least 518 institutions, <a href="http://gofossilfree.org/commitments/">collectively worth US$3.4 trillion</a>, are either fully or partially divesting. </p>
<p>The list includes groups such as the <a href="http://www.rbf.org/about/divestment">Rockefeller Brothers Fund</a>, local governments such as the <a href="https://350.org.au/news/act-government-to-divest-from-fossil-fuels/">Australian Capital Territory</a> and the cities of <a href="http://cleantechnica.com/2015/10/20/oslo-becomes-first-capital-city-divest-fossil-fuels/">Oslo</a> and <a href="http://gofossilfree.org/europe/press-release/copenhagen-bans-investments-in-coal-oil-and-gas/">Copenhagen</a>, among many others. </p>
<p>Meanwhile <a href="https://theconversation.com/universities-are-slowly-feeling-their-way-forward-on-divestment-37108">universities</a>, which currently make up 12% of this list, have become a particular target for the divestment movement. This is because they are forward-looking institutions with progressive, well-educated stakeholders. After all, it was university faculty members across the world who helped to set out the problem of climate change, and young students who will be among the generations most affected by its future impacts. </p>
<p>Just as universities were <a href="http://www.jstor.org/stable/2706752?seq=1#page_scan_tab_contents">among the first movers against apartheid</a>, they can set an example to others in the case of climate. Universities, many of which manage <a href="http://endowments.com/funds/">multi-billion-dollar endowments</a>, have both the ability and responsibility to exercise financial power and act early on long-term moral problems. </p>
<p>If the Paris investment signal exists, then, we can expect universities to act well in advance of those with much greater inertia and vested interests in the status quo, such as profit-making corporations (which make up just 3% of Fossil Free’s divestment list). </p>
<h2>Mixed results</h2>
<p>So far the <a href="https://theconversation.com/actions-not-words-should-earn-divestment-advocates-praise-38605">response from universities has been patchy</a>, particularly in Australia. The Australian National University (ANU) provides an informative case study. It shows both the potential of divestment and the limits of the Paris market signal. </p>
<p>In 2014, <a href="http://www.anu.edu.au/news/all-news/university-to-divest-holdings-in-seven-companies">ANU blacklisted</a> seven resource companies (including two fossil fuel firms, Santos and Oil Search) on the basis of its “socially responsible investment” policy. This triggered a backlash from the likes of the then treasurer, Joe Hockey, and prime minister, Tony Abbott, as well as sustained criticism from the <a href="http://www.crikey.com.au/2014/11/06/by-the-numbers-the-fins-divestment-obsession/">Australian Financial Review</a>. </p>
<p>The outcry showed the <a href="http://www.anu.edu.au/news/all-news/outrage-at-anu-divestment-shows-the-power-of-its-idea-0">power that universities can wield</a> in the climate debate when they put their money where their mouth is. In this case it was a positive impact as it triggered a wider debate on climate policy and investments. </p>
<p>Last month, the ANU <a href="http://www.anu.edu.au/news/all-news/update-on-anu-socially-responsible-investment-policy">updated its policy</a>, announcing a 39% reduction in the carbon intensity of its stock portfolio and pledging to divest from companies that draw more than 20% of their revenue from coal. </p>
<p>However, the policy allows for continued investment in diversified mining companies such as Woodside Petroleum, Rio Tinto and BHP Billiton. This potentially includes firms with significant fossil fuel holdings (BHP Billiton Mitsubishi Alliance is the <a href="https://www.qrc.org.au/01_directory/details.asp?ID=6">largest Australian coal producer</a>, accounting for a quarter of Australian coal exports). </p>
<p>This is partial, not full, divestment – it’s a positive step, but far from the seismic investment shift needed to meet the Paris climate goals. </p>
<p>Importantly, the trigger for change has come from within, rather than from Paris. There has been overwhelming pressure from <a href="http://www.theguardian.com/environment/2016/mar/15/staff-demand-anu-finish-divestment-from-fossil-fuels">staff</a> and <a href="http://www.woroni.com.au/news/anu-divests-divestman-speaks/">students</a> to divest fully. Yet the university has resisted these calls. Indeed, ANU Vice-Chancellor Brian Schmidt <a href="https://twitter.com/cosmicpinot/status/725986935207006208">last month tweeted</a> that while the “future lies in being part of the transition to low emissions”, fossils fuels are “good business for universities” for the time being at least. </p>
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<p>There are several counterarguments to this , from the <a href="http://ceem.unsw.edu.au/sites/default/files/documents/Low%20Emission%20Fossil%20Scenarios.pdf">falling costs of renewable energy</a>, to the <a href="http://www.theguardian.com/environment/2015/apr/10/fossil-fuel-free-funds-out-performed-conventional-ones-analysis-shows">improving performance of fossil-free investment funds</a>, which often outstrip more conventional ones. But on a basic level it comes down to leadership.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/122644/original/image-20160516-26393-7lqg3.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/122644/original/image-20160516-26393-7lqg3.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip"></a>
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<span class="caption">ANU staff and students are campaigning hard for full divestment.</span>
<span class="attribution"><span class="source">Source:</span>, <span class="license">Author provided</span></span>
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</figure>
<p>The ANU has <a href="http://www.screencraft.com.au/ourwork/anu-thought-leader-branding-campaign">branded itself</a> as a place of “thought leadership”. Its current actions show neither long-term thought nor leadership. True leadership would mean showing real belief in the implications of the Paris Agreement. </p>
<p>Widespread, full university divestment from fossil fuels would further pressure national governments to strengthen their commitments – which will be <a href="https://theconversation.com/most-countries-need-to-at-least-double-their-efforts-on-climate-study-49731">crucial if the Paris Agreement is to meet its goals</a>. </p>
<p>In contrast, continued investment in fossil fuels weakens such pressure and bolsters a belief in the continued relevance of the fossil fuel industry in a post-Paris world. </p>
<p>Universities such as the ANU have not responded swiftly enough to Paris and the signalling of the end of the fossil fuel era. If thought leaders won’t do it, how can we ask the same of governments and banks?</p><img src="https://counter.theconversation.com/content/59263/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Luke Kemp has received funding from both the Australian and German governments. As a staff member of the ANU he is an active participant of the &#39;Fossil Free ANU&#39; campaign. </span></em></p>The Paris climate deal has supposedly sent a signal to the wider world that now is the time to pull out of fossil fuel investments. Universities can set the pace – but they need to do more.Luke Kemp, Lecturer and PhD Candidate in International Relations and Environmental Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/330822014-10-27T19:08:02Z2014-10-27T19:08:02ZANU might be distorting markets, but markets are distorting society<p>John D. Rockefeller turned in his grave when the news drifted down to Hades that the Rockefeller Brothers Fund is <a href="http://www.ai-cio.com/channel/ASSET_ALLOCATION/Rockefeller_Fund_Dumps_Fossil_Fuels.html">divesting from fossil fuel</a> companies … even from John D’s once very own Exxon.</p>
<p>The <a href="http://www.afr.com/p/national/anu_divestment_list_sparks_outrage_cfSmZk6H5SwIAQZniUXKKI">shrill yelps</a> that greeted ANU’s similar decision confirm that others too feel threatened. The decision was likely arrived at through the confluence of economic/financial and moral/political criteria. </p>
<p>On the economic side, ANU’s view seems to be that fossil fuel companies are becoming dangerously risky as the world acts on climate change through the development of alternative sources of energy, actions that will leave assets stranded. On the moral/political side, its view seems to be that burning fossil fuels is wrong because of the damage it does to society.</p>
<p>Therein lie the dual threats. On one hand, the (supposedly flawed) economic analysis threatens the industry as it is currently structured. On the other hand, the very use of moral/political analysis threatens economics as it is currently structured. To use other than “pure” economic/financial criteria is an affront to the dominant paradigm that economics is a value-free, “objective science” and that, as a consequence, free markets produce optimal economic outcomes. Hence free markets are sacrosanct. </p>
<p>According to that paradigm, the market is always right. Its righteous power ensures fossil fuels are correctly priced given the risks involved. Correctness is attained through the objective actions of rational corporate decision-makers responding to price signals who drive their fossil fuel companies to adapt to the changing world. </p>
<p>For true believers, that most companies have made but token, PR-driven changes, typified by BP colouring its bowsers green, confirms the incorrectness of ANU’s decision. For them, taking any investment action on climate change is likely “sub-optimal” as even if markets don’t instantly set the right price (a possibility they admit to sotto voce), doing nothing remains optimal over the shorter term until pricing signals become clearer. </p>
<p>But waiting for greater clarity, waiting until the assets are exposed to a “clear and present danger” of being stranded or until correct pricing is almost certainly correct, is surely “sub-optimal” risk-management. Increasingly institutional investors do see climate change affecting their portfolios and justify their actions through economic/financial risk analysis. Too often for paradigm believers an unstated moral/political framework underlies those decisions and actions.</p>
<p>A common strategy, less extreme than ANU’s, is to underweight exposure to fossil fuels and hedge the remaining exposure with overweights to alternative energy, perhaps augmented by actively encouraging portfolio companies to reduce their carbon emissions. A different strategy, one adopted by the Yale Endowment, is to ask the funds’ investment managers to “avoid companies that refuse to acknowledge the social and financial costs of climate change and fail to take economically sensible decisions to reduce greenhouse gas emissions”. </p>
<p>The approach taken by the ANU and some large Dutch pension funds is to divest totally from fossil fuels … now. From a long-term perspective that’s justifiable even within the narrow confines of maximising expected risk-adjusted returns, but it does expose the fund to the risk of shorter-term underperformance. ANU did consider social, moral and perhaps political criteria, which inflamed market fundamentalists - hence the yelps. </p>
<h2>Why can’t investors have morals?</h2>
<p>Yet all decisions do and should have moral, social and political dimensions. Would those making value-free purely financial decisions have invested in gas chambers in 1941, a legal investment with spectacular prospective returns, or would even they find it too morally repugnant? </p>
<p>Making trade-offs between the social and the economic, between the “soft” and the “hard”, requires a wisdom and judgement untouched by universities’ narrow “value-free” training. ANU’s public statements lacked that judgement. To declare that it won’t invest in anything that does “social harm” is naïve and disingenuous. Will it divest from armaments, alcohol and from banks that lend to harmful activities? Will it divest from the sovereign bonds of all countries that do “social harm”? </p>
<p>Harvard, one of the keepers of the value-free paradigm, argues for a clear separation between the financial and the social; it doesn’t wish to be a “political actor” - implying that the courses it teaches, the appointments it makes, the research it does, the consulting to corporations it undertakes and the advice its professors gives to politicians are all value-free. How’s that for naïve and disingenuous?</p>
<p>Those who see a nexus between the economic and the social, who reject the value-free belief as not just false but undesirable must confront Milton Friedman’s famous dictum that “the sole purpose of a company is to make (legal) profits”. His dictum is four-times wrong. </p>
<p>It is technically wrong because directors are legally responsible for the entire company not just the equity holders. It is systemically dangerously wrong because the purpose of companies should be to produce goods and services people will pay for. Profits are a consequence not the aim. Once profit becomes the aim companies can readily justify the legal selling of NINJA loans to poor unemployed people in Alabama, with the massive human and global consequences we’re still struggling with. It is wrong structurally because companies are social constructs, so decisions will always be redolent with non-objective, extra-rational, value-laden, non-economic influences and outcomes. Was decision-making at the University of Chicago really not like that?</p>
<p>But Freidman’s grandest failure is that he is wrong socially: we expect more than mere legality from every other entity. We expect more than mere legality from our friends, relatives and colleagues; we expect more than mere legality from universities, pension funds and governments, from all entities that form our civil society. Do we want companies and funds to be the only entities excluded from our social norms?</p>
<p>The shrill yelpers see their oft-heard tag line, “governments distort markets” being threatened by the little-heard “markets distort society” … and it should be threatened. Our world urgently needs alternative renewable sources of energy and alternative renewable sources of economic thinking.</p><img src="https://counter.theconversation.com/content/33082/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jack Gray ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d&#39;une organisation qui pourrait tirer profit de cet article, et n&#39;a déclaré aucune autre affiliation que son poste universitaire.</span></em></p>John D. Rockefeller turned in his grave when the news drifted down to Hades that the Rockefeller Brothers Fund is divesting from fossil fuel companies … even from John D’s once very own Exxon. The shrill…Jack Gray, Adjunct Professor of Economics, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/327362014-10-12T19:08:45Z2014-10-12T19:08:45ZOutrage at ANU divestment shows the power of its idea<p>Is the Australian National University’s decision to sell its shares in some resource companies merely tokenistic? Far from it. The <a href="http://www.afr.com/p/national/anu_divestment_list_sparks_outrage_cfSmZk6H5SwIAQZniUXKKI">outrage</a> from the affected companies shows how much influence universities can wield when they put their money where their mouth is. </p>
<p>The question is, will other universities follow suit, having seen the considerable criticism that greeted ANU’s decision? </p>
<p>When ANU announced earlier this month that it would divest shareholdings in seven resources companies – Santos, Oil Search, Iluka Resources, Sandfire, Sirius, Newcrest and Independence Group – it initially offered only a <a href="http://news.anu.edu.au/2014/10/03/university-to-divest-holdings-in-seven-companies">sparse explanation</a>. The decision, it said, was the result of a review commissioned as part of the university’s Socially Responsible Investment Policy, with (unpublished) environmental, social and governance ratings provided by the firm <a href="http://www.caer.org.au">CAER</a>. </p>
<p>Some of the companies responded angrily, claiming that the decision was <a href="http://www.theajmonline.com.au/mining_news/news/2014/october-2014/october-9-2014/other-news/sandfire-angry-over-anu-blacklisting">unfair</a>, protesting that CAER’s assessment was <a href="http://www.afr.com/p/national/company_on_anu_blacklist_takes_action_lVClMbXjCIn7YkNekhoYgO">inaccurate</a>, and threatening legal action. </p>
<p>The outrage has been fanned by a week-long campaign in the pages of the Australian Financial Review (see <a href="http://www.afr.com/p/national/anu_divestment_list_sparks_outrage_cfSmZk6H5SwIAQZniUXKKI">here</a>, or any other edition of the AFR between October 6 and 11). </p>
<p>On Saturday, Australia’s Treasurer Joe Hockey <a href="http://www.afr.com/p/national/joe_hockey_takes_aim_at_lofty_anu_jCEPln8zAJDYAZRYomRhyK">weighed in</a>, describing ANU as “removed from the reality of what is helping to drive the Australian economy and create more employment”. </p>
<p>On the flip side, resource companies that escaped the divestment list have seized the opportunity to claim sustainable credentials. BHP Billiton’s president for environment Mike Henry <a href="http://www.abc.net.au/radionational/programs/breakfast/bhp-climate-proofing-its-financial-bottom-line/5800460">hailed</a> his employer’s resilient, diversified portfolio, and reiterated the company’s support for a price on carbon. </p>
<h2>Why so upset?</h2>
<p>It is an astonishingly intense response to a relatively minor shift in a smallish investment portfolio. ANU’s divestment list represents just 5% of the university’s domestic equity, and the value of shares to be sold is around A$16 million. </p>
<p>The seven companies’ combined market capitalisation is A$45 billion. So the divestment amounts to 1 in every 3,000 shares, on average, for these companies. Any direct impact on their share prices will be negligible, and ANU hasn’t ruled out reinvesting if their ratings improve. Why, then, has it been so controversial? </p>
<p>First, divestment from fossil fuels seems to hit a strong nerve with the public. Many people feel satisfaction or pride if their employer or super fund adjusts investments in line with their personal values. </p>
<p>Second, divestment can bring great negative visibility for individual companies. ANU certainly named names in its <a href="http://news.anu.edu.au/2014/10/03/university-to-divest-holdings-in-seven-companies">initial media release</a>.</p>
<p>Third, it puts the spotlight on risk: fossil fuel reserves far exceed the amount that the world can use if climate change is to be addressed, and so there is a fundamental question mark over the future of fossil fuel industries.</p>
<h2>Values and leadership</h2>
<p>It is not only the strength of the companies’ response and the fieriness of the AFR’s campaign that is remarkable, but also the fact that the government is getting involved in the way it has. </p>
<p>The Australian government seems to <a href="https://www.pm.gov.au/media/2014-05-28/address-minerals-week-2014-annual-minerals-industry-parliamentary-dinner-canberra-0">believe</a> that national prosperity is tied to fossil fuels, and that “Team Australia” ought to be backing the sector and its individual companies, no matter their environmental performance. </p>
<p>Pitted against this are the facts that fossil fuel use must decline to avoid the worst of climate change, that this is <a href="http://unsdsn.org/what-we-do/deep-decarbonization-pathways">possible</a> without harming economic prosperity, in <a href="https://theconversation.com/australia-can-get-to-zero-carbon-emissions-and-grow-the-economy-32015">Australia</a> and <a href="https://theconversation.com/china-heads-for-price-on-carbon-energy-market-overhaul-is-next-31119">overseas</a>. </p>
<p>Many people feel that Australia should embrace a low-carbon future rather than ride the fossil fuel wave to the end. For some, it is a question of Australia’s economic prospects. For others, it is a question of values. </p>
<p>ANU Vice-Chancellor Ian Young clearly intends to lead, <a href="http://www.abc.net.au/lateline/content/2014/s4103229.htm">telling ABC Lateline</a>: </p>
<blockquote>
<p>For a university like ours, which is, for instance, a major researcher in environment and alternative energy, we need to be able to put our hand on our heart when we talk to our students and to our alumni and to our researchers and be able to say that we’re confident that the sort of companies that we’re investing in are consistent with the broad themes that drive this university.</p>
</blockquote>
<h2>Power and money</h2>
<p>One lesson from this episode is that Australian universities have significant power (perhaps even more than they realised) in the debate over corporate responsibility. Who would have thought that a small divestment of A$16 million would draw fire from the federal treasurer and garner a week of front-page coverage in the country’s leading business newspaper? </p>
<p>That kind of power obviously brings responsibility. </p>
<p>Of course, there is no obligation on any investor to explain the reason for buying or selling a particular stock. Yet in divesting, universities need to make doubly sure to consult extensively, explain rationales, set clear benchmarks, define criteria, and make their assessments open to scrutiny.</p>
<p>The ANU list is the result of a single assessment process which has not been open to scrutiny. The assessment uses a number of indicators, making it more vulnerable to criticism. </p>
<h2>A snowball in the making?</h2>
<p>ANU is the first Australian university to divest publicly. But it is a fair bet that the issue is on the agenda for most major Australian universities, or will be soon. </p>
<p>Sydney University announced a review of its investment portfolio, provoking <a href="https://theconversation.com/coal-divestment-and-democracy-31764">strong responses by the coal industry</a>. </p>
<p>The <a href="http://aodproject.net/">Asset Owners Disclosure Project</a>, chaired by my ANU colleague John Hewson, has been pushing large asset owners, including universities, to reveal their fossil fuel interests. </p>
<p>In the United States, where the divestment movement originated, <a href="http://news.stanford.edu/news/2014/may/divest-coal-trustees-050714.html">Stanford University</a> is among many organisations that have pledged not to invest in coal, although America’s richest university, Harvard, has resisted calls to join them. </p>
<p>The boldest recent divestment decision came not from a university, but a philantrophic trust: the Rockefeller Foundation, built on old oil money, announced that it will divest all investments in fossil fuels, and that is has already sold its investments in coal and tar sands. </p>
<p>The question is, will other Australian universities follow suit, emboldened by the lead from Canberra? Or will they fear to tread where ANU has, having seen the backlash from industry and government? </p>
<h2>The divestment train is moving</h2>
<p>Universities should take heart in the fact that there are much larger capital movements under way away from fossil fuels. Initiatives such as the <a href="http://www.un.org/climatechange/summit/2014/09/investors-commit-decarbonize-100-billion-investments/">Portfolio Decarbonization Coalition</a> are growing; this Coalition alone has a divestment target of US$100 billion by December 2015.</p>
<p>As Nathan Fabian, chief executive of Australia’s Investors Group on Climate Change, explained at a <a href="http://www.carbonmarketinstitute.org/events/the_road_to_paris_2015">forum last week</a>, institutional investors increasingly see that fossil fuel companies’ aspirations are incompatible with the global goal to limit climate change. </p>
<p>As a result, investments with companies that are stuck in the carbon business and have no viable plans to evolve their business are increasingly seen as risky. As Fabian put it: “Companies need a low carbon transition story that is fair dinkum. Investors are tired of denialism and obfuscation”. </p>
<p>If divestment grows large, then fossil fuel companies’ stock market values will tend to be lower – and early divestment will not only be a statement, but a strategy to increase university’s returns on financial investments.</p><img src="https://counter.theconversation.com/content/32736/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frank Jotzo has grants from the Australian Research Council and the Australian government. None of his grants relate to divestment. He is in no way involved in ANU investment choices. </span></em></p>Is the Australian National University’s decision to sell its shares in some resource companies merely tokenistic? Far from it. The outrage from the affected companies shows how much influence universities…Frank Jotzo, Director, Centre for Climate Economics and Policy, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.